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Happy New Year's Eve!
As it's the last day of the year and my last working day, here is a short thread of 3 reflections on investment markets/themes from 2020:
As it's the last day of the year and my last working day, here is a short thread of 3 reflections on investment markets/themes from 2020:
1. The market is loyal to no one.
'Unprecedented' has been overused, but it really does seem the only word appropriate. Good managers with decades of experience have been punished for doing what seems sensible. New investors have made random stock picks and made >100% returns.
'Unprecedented' has been overused, but it really does seem the only word appropriate. Good managers with decades of experience have been punished for doing what seems sensible. New investors have made random stock picks and made >100% returns.
The market is a cruel beast. It happens every year of course, but I have never known it to be as pronounced as it has been in 2020.
2. ESG continues its rise.
ESG stocks have had another bumper year, although this can once again be attributed to the strength of Tech and US stocks which ESG tends to be skewed towards. Nonetheless, managers are falling over themselves to obtain ESG badges and sell ESG funds
ESG stocks have had another bumper year, although this can once again be attributed to the strength of Tech and US stocks which ESG tends to be skewed towards. Nonetheless, managers are falling over themselves to obtain ESG badges and sell ESG funds
My boss believes that when there's a rotation and ESG underperforms, people will lose interest. I disagree; most investors I work with (particularly young ones) have an ESG priority beyond maximising their returns.
Is ESG a trend? Yes, but it's a trend that's here to stay
Is ESG a trend? Yes, but it's a trend that's here to stay
3. Not all recoveries are made equal.
Most of the developed world has bounced hard since March, but this has not been the case with the UK. It has large exposure to the worst performers (financials, energy) and gained little from the best (tech). Little money has flowed in.
Most of the developed world has bounced hard since March, but this has not been the case with the UK. It has large exposure to the worst performers (financials, energy) and gained little from the best (tech). Little money has flowed in.
There is real quality in the UK market, but no one has cared: even with the vaccine rally and the Brexit deal the FTSE remains suppressed. A pessimist might see it as the remains of a once far more significant player on the world stage. An optimist might see it as an opportunity
